Introduction and background.
1. This dispute arises from a contract for the manufacture and supply of sanitary pads, adult diapers and under-pads. The Plaintiff, Talent High Trading Company Limited, is a company incorporated in China. It claims USD 376,644.70 from the Defendant, Deekay Relief Limited, being the unpaid purchase price for goods shipped to the Port of Mombasa in 2016. The Defendant denies liability and counterclaims Kshs. 17,797,167.28, said to represent profit lost when its bid in a tender by Kenyatta National Hospital (“KNH”) was unsuccessful.
2. By a Plaint dated 11th January 2017, the Plaintiff pleaded that, following negotiations between the parties, it accepted the Defendant’s order and agreed to supply the goods at a total price of USD 376,644.70 on Cost, Insurance and Freight (“CIF”) terms. Two consignments were thereafter shipped from China. The Plaintiff’s case is that it performed its obligations under the contract, but the Defendant failed to take delivery and pay the agreed price.
3. The Defendant resisted the claim through its Amended Statement of Defence and Counterclaim dated 19th July 2017. It does not seriously dispute that a contract existed or that the goods were manufactured and shipped. Its case is that the goods were not fit for their intended purpose and were not of merchantable quality. It relies principally on the rejection of samples by KNH and on subsequent testing by the Kenya Bureau of Standards (“KEBS”). It contends that the goods could not lawfully be admitted into the Kenyan market and that, as a consequence, it lost the KNH tender and the profit it expected to earn from it.
4. The Plaintiff called one witness, Mr Kalpesh Gosrani (PW1), who described himself as the Plaintiff’s local agent. The Defendant called Mr Stephen Mutua (DW1), one of its directors, and Mr Enock Katam (DW2), the Head of the Textile Laboratory at KEBS. Their oral evidence is important because it narrows considerably the matters that are truly in dispute.
5. I have considered the pleadings, the documentary evidence, the oral testimony and the parties’ submissions. The dispute turns principally on what the Plaintiff contracted to supply, whether the Defendant proved that the goods actually shipped were non-conforming, and the consequences that follow from those findings.
Issues for determination
6. In my view, the following issues arise for determination:
a. Whether there was a valid and enforceable contract between the parties and, if so, what its material terms were.
b. Whether the Plaintiff breached the contract or the implied conditions under the Sale of Goods Act by supplying goods that were not reasonably fit for their purpose or of merchantable quality.
c. Whether the Plaintiff is entitled to recover the purchase price of USD 376,644.70.
d. Whether the Defendant has proved its Counterclaim for Kshs. 17,797,167.28 or any other damages.
e. Who should bear the costs of the suit and Counterclaim.
Analysis and determination
7. The governing evidential principle is straightforward. Under sections 107 and 108 of the Evidence Act, a party who asks the Court to find in its favour on the existence of a fact bears the burden of proving that fact, unless the law places the burden elsewhere. The applicable standard in this civil dispute is proof on a balance of probabilities. The Court must therefore determine which account is more probable on the evidence as a whole.
8. That burden is particularly important here. The Plaintiff must prove the contract, its performance and the Defendant’s failure to pay. Conversely, because the Defendant relies on alleged non-conformity both as a defence to the price and as the foundation of its Counterclaim, it bears the burden of proving the facts on which that alleged non-conformity rests.
Whether there was a valid and enforceable contract and what its terms were
9. There is no real dispute that the parties entered into a contract. The Defendant’s own pleading proceeds on that basis, and its Counterclaim necessarily depends upon the existence of the same contract. The evidence shows negotiations by email, the supply and approval of samples, the issue of a proforma invoice, arrangements for shipment, and the eventual shipment of the goods. Those acts are consistent only with a concluded commercial bargain.
10. The more important question is the content of that bargain. The Defendant’s email of 16th May 2016, at pages 26 to 30 of the Plaintiff’s bundle, set out the products required and a number of specifications. PW1 accepted in cross-examination that there was a KNH tender and that the Defendant intended to obtain the goods from the Plaintiff for onward supply. He also accepted that the email contained specifications relating, among other matters, to expiry dates, waterproof material and absorbency. He was clear, however, that the goods were to be supplied in accordance with the specifications communicated by the Defendant.
11. The evidence further shows that physical samples were supplied before manufacture and shipment. PW1 testified that the samples were approved before shipment and that pre-export inspection took place in China. DW1 independently confirmed that samples had been received in May 2016 and that a Certificate of Conformity (“CoC”) was issued following inspection at the port of loading. These matters are material because they demonstrate that the Defendant had an opportunity, before the commercial quantities were shipped, to examine the type of product it had ordered.
12. The Plaintiff thereafter issued a proforma invoice at page 54 of its bundle. The invoice identified the goods, quantities and price and, importantly, referred to “TENDER NO. KNH/T/02 PART A/2016-2018”. I therefore do not accept the proposition, appearing in parts of the parties’ arguments, that the Plaintiff had no knowledge at all of the KNH tender. The document shows that by the time the proforma invoice was issued the Plaintiff knew that the transaction was connected to that tender.
13. That finding, however, does not answer the separate question whether every technical requirement in the KNH tender became a contractual term between these parties. The evidence does not show that the tender document itself was incorporated into the contract, nor that the Plaintiff warranted that the Defendant would pass KNH’s technical evaluation or win the tender. The contractual specifications proved before the Court are those communicated in the parties’ correspondence and reflected in the samples and commercial documents.
14. The parties’ subsequent conduct reinforces that conclusion. The Defendant supplied shipping information, dealt with the import documentation and did not, before shipment, object to the descriptions contained in the proforma invoice and packing documents. I therefore find that there was a binding contract under which the Plaintiff was required to supply goods conforming to the specifications communicated by the Defendant, subject also to such conditions as the Sale of Goods Act implied into the transaction.
Whether the Plaintiff supplied goods that were unfit for purpose or not of merchantable quality
15. Section 16 of the Sale of Goods Act is central to this issue. Under section 16(a), where a buyer makes known to the seller the particular purpose for which the goods are required in circumstances showing reliance on the seller’s skill or judgment, there is an implied condition that the goods shall be reasonably fit for that purpose. Under section 16(b), where goods are bought by description from a seller dealing in goods of that description, there is an implied condition that they shall be of merchantable quality. The proviso to section 16(b) excludes defects which an examination by the buyer ought to have revealed.
16. Kenyan courts have applied section 16 according to its terms. In Best Cars Limited t/a Impact Motors v Omoke & another [2025] KEHC 474 (KLR), the High Court applied section 16 and emphasised that the proviso concerning examination by the buyer is confined to defects which the examination ought reasonably to have revealed. The question here is therefore evidential: did the Defendant prove that the goods supplied by this Plaintiff breached the implied conditions relied upon?
17. The Plaintiff relies on the CoCs dated 22nd and 31st August 2016, issued by CCIC Inspection Co. Ltd under the pre-export verification regime. PW1 testified that the goods could only be shipped after that inspection. DW1 also accepted that a CoC had been issued at the port of loading. The certificates are not conclusive proof that the goods could never subsequently be found non-compliant. Indeed, PW1 fairly accepted in cross-examination that KEBS retained power to inspect at the point of entry and that the CoC did not discharge the importer or exporter from their legal or contractual obligations. The certificates nevertheless constitute contemporaneous evidence that the goods presented for export had passed the prescribed pre-export conformity process.
18. The Defendant relies on two distinct bodies of evidence in answer. The first concerns the samples submitted to KNH. The letters dated 6th and 15th December 2016 record that samples failed aspects of KNH’s technical evaluation. But DW1 made a critical admission in cross-examination: the samples examined by KNH were not taken from the containers that arrived at Mombasa. They were samples received earlier, in May 2016, and supplied to KNH before the consignments arrived. Those letters may therefore prove that the pre-shipment samples did not satisfy aspects of KNH’s tender evaluation. They do not, without more, prove that the commercial consignments subsequently manufactured and shipped contained the same defects.
19. The timing of the Defendant’s conduct is also relevant. On 28th October 2016, before the later KEBS testing, the Defendant sought assistance to return the goods to China because the tender had been cancelled while the goods were at sea. PW1 confirmed in cross-examination that the tender had been cancelled while the goods were in transit and that this had nothing to do with the supplier. The contemporaneous communication did not identify defective quality as the reason for wishing to reverse the transaction. That does not make a later quality complaint legally impossible, but it is a circumstance the Court must weigh when deciding whether that later complaint has been proved.
20. The second body of evidence is the KEBS testing. DW2 was a qualified textile engineer and the head of the relevant laboratory. His evidence established that certain samples received by the laboratory in January 2017 failed specified parameters. For example, he testified that an adult diaper sample returned a result of 8.7 against a minimum requirement of 10, and that an under-pad recorded water resistance of 46 against a requirement of 150. His evidence was therefore capable of proving what the laboratory found in relation to the samples it tested.
21. The difficulty lies in proving the provenance of those samples. During the hearing, pages 5, 8 and 9 of the laboratory reports were expunged because the relevant expert was not present to produce them. More importantly, DW2 candidly accepted in cross-examination that he did not personally receive the samples from the inspection officer. He could explain the ordinary internal KEBS process by which samples move from an inspection officer at Kilindini, through a sample centre, to the laboratory, but he could not identify from his own knowledge the particular packages taken from the Plaintiff’s containers, the number sampled, or the act of sampling itself.
22. The evidential gap was expressly exposed during DW2’s cross-examination: the issue was not whether the laboratory had obtained failing results, but what connected the samples tested to the goods supplied by the Plaintiff. DW2 could speak authoritatively to the test results. He could not establish the source of the samples. The inspection officer who allegedly drew them, identified in the evidence as Abdi Nasser, was not called.
23. That gap is decisive. The Defendant asks the Court to infer that because samples tested at the KEBS laboratory failed certain standards, the goods shipped by the Plaintiff were necessarily defective. But the intermediate fact, namely that the tested samples were drawn from these particular consignments, had to be proved. On the evidence before me, it was not. The Court cannot fill that missing link by assumption.
24. I have also considered the Defendant’s reliance on the KNH tender as the particular purpose under section 16(a). As already found, the Plaintiff knew that the transaction was connected with the KNH tender. That knowledge is relevant. But even assuming that section 16(a) imposed an obligation that the goods be reasonably fit for that disclosed purpose, the Defendant still had to prove that the goods actually supplied were unfit. The KNH evidence related to earlier samples, while the later KEBS evidence was not sufficiently linked to the shipped consignments. The statutory implication does not relieve the buyer of proving the alleged breach.
25. As to merchantable quality under section 16(b), I would not go so far as to hold that the Defendant’s examination of samples extinguished every implied condition as to quality. The statutory proviso is narrower: it applies only to defects which that examination ought to have revealed. The decisive point remains that the Defendant has not proved, on a balance of probabilities, that the consignments shipped were affected by the defects later alleged.
26. Nor does the fact that the transaction was on CIF terms determine whether the goods were conforming when shipped. CIF terms are relevant principally to delivery, documents, insurance and the passing of risk. They do not excuse a seller from supplying goods that conform to the contract at the point when its contractual obligation is performed. The Plaintiff succeeds on this issue not because risk had passed, but because the Defendant has failed to prove that the goods supplied were non-conforming at the material time.
27. I therefore find that the Defendant has not established its pleaded defence that the Plaintiff breached the contract by supplying goods that were unfit for purpose or not of merchantable quality. The contemporaneous pre-export certificates support the Plaintiff’s case, while the Defendant’s evidence does not sufficiently connect either the KNH sample failures or the KEBS laboratory failures to a breach in the actual consignments for which payment is claimed.
Whether the Plaintiff is entitled to the purchase price
28. It is common ground that the goods were manufactured and shipped and that the Defendant did not pay the invoiced price. DW1 accepted that it was the Defendant’s duty to collect the goods when they arrived, and further accepted that the Defendant did not clear them. The Plaintiff’s invoices and shipping documents identify the consideration claimed as USD 376,644.70.
29. The Defendant’s justification for non-payment depended substantially upon establishing that the goods were lawfully rejected for non-conformity. For the reasons already given, that defence has not been proved. The contemporaneous email of 28th October 2016 is particularly significant because the Defendant’s first recorded reason for seeking to return the goods was the cancellation of the tender while the consignments were in transit, not a defect in the goods.
30. A buyer’s commercial purpose failing after goods have been ordered and shipped does not, without a contractual term transferring that risk to the seller, discharge the buyer from its payment obligation. No such term has been proved here. The Plaintiff performed the bargain proved before the Court by manufacturing and shipping the ordered goods. The Defendant did not take delivery or pay.
31. I accordingly find that the Plaintiff has proved its claim for the agreed purchase price of USD 376,644.70 on a balance of probabilities.
Whether the Defendant’s Counterclaim should be allowed
32. The Counterclaim seeks Kshs. 17,797,167.28 as alleged loss of profit from the KNH tender, together with other relief. It fails at the first stage because I have found that the Defendant did not prove breach by the Plaintiff. There is therefore no contractual wrong upon which the claimed damages can rest.
33. Even if I had reached the opposite conclusion on breach, the Counterclaim would still encounter substantial difficulties of causation and proof. The Defendant was required to show, not merely that its samples failed aspects of technical evaluation, but that absent the Plaintiff’s breach it would probably have secured the tender and earned the profit claimed.
34. The evidence did not establish that proposition. The tender was competitive. The material before the Court did not demonstrate that the Defendant was entitled to the whole of the tendered quantities, or that it would necessarily have prevailed over competing bidders. DW1’s own evidence was that “the initial cancellation of tender was not an issue”, while the contemporaneous correspondence shows that cancellation was the reason initially given for seeking to return the goods. Those matters make the asserted causal chain uncertain.
35. There is a further problem with quantum. The schedule relied upon by the Defendant repeatedly describes costs and figures as “approximate”. A claim for a quantified loss of profit of this nature is a claim for special damages and must be specifically pleaded and strictly proved. The Court of Appeal stated that principle in Hahn v Singh [1985] KECA 129 (KLR) and reaffirmed it in Capital Fish Kenya Limited v The Kenya Power & Lighting Company Limited [2016] KECA 56 (KLR). The latter decision emphasises that a claimant cannot simply place figures before the Court without credible evidence proving the loss claimed.
36. Here, the Defendant did not produce evidence establishing an award of the tender to it, a contractual entitlement to the quantities on which the calculation was based, or contemporaneous financial material proving the net profit that would have been earned. The figure of Kshs. 17,797,167.28 is therefore not strictly proved.
37. The Defendant’s prayers for general damages and loss of bargain do not alter that conclusion. The Court of Appeal has repeatedly affirmed that, as a general rule, general damages are not recoverable for breach of contract where the loss claimed is capable of quantification. See Kenya Tourist Development Corporation v Sundowner Lodge Limited [2018] KECA 312 (KLR). The Defendant having quantified its alleged commercial loss, but failed to prove it, the Court cannot substitute an unparticularised award of general damages for the loss which was pleaded but not proved.
38. The Counterclaim is therefore dismissed in its entirety.
Costs
39. Under section 27 of the Civil Procedure Act, costs are in the discretion of the Court, though they ordinarily follow the event. The Plaintiff has succeeded in its claim and has successfully resisted the Counterclaim. I see no reason to depart from the ordinary rule. The Plaintiff shall have the costs of both the suit and the Counterclaim.
Conclusion and disposition
40. For the foregoing reasons, I make the following orders:
a. Judgment is entered for the Plaintiff against the Defendant in the sum of USD 376,644.70.
b. Interest on the said sum shall accrue at court rates from 11th January 2017 until payment in full.
c. The Defendant’s Counterclaim is dismissed in its entirety.
d. The Plaintiff is awarded the costs of the suit and the Counterclaim.
1. This dispute arises from a contract for the manufacture and supply of sanitary pads, adult diapers and under-pads. The Plaintiff, Talent High Trading Company Limited, is a company incorporated in China. It claims USD 376,644.70 from the Defendant, Deekay Relief Limited, being the unpaid purchase price for goods shipped to the Port of Mombasa in 2016. The Defendant denies liability and counterclaims Kshs. 17,797,167.28, said to represent profit lost when its bid in a tender by Kenyatta National Hospital (“KNH”) was unsuccessful.
2. By a Plaint dated 11th January 2017, the Plaintiff pleaded that, following negotiations between the parties, it accepted the Defendant’s order and agreed to supply the goods at a total price of USD 376,644.70 on Cost, Insurance and Freight (“CIF”) terms. Two consignments were thereafter shipped from China. The Plaintiff’s case is that it performed its obligations under the contract, but the Defendant failed to take delivery and pay the agreed price.
3. The Defendant resisted the claim through its Amended Statement of Defence and Counterclaim dated 19th July 2017. It does not seriously dispute that a contract existed or that the goods were manufactured and shipped. Its case is that the goods were not fit for their intended purpose and were not of merchantable quality. It relies principally on the rejection of samples by KNH and on subsequent testing by the Kenya Bureau of Standards (“KEBS”). It contends that the goods could not lawfully be admitted into the Kenyan market and that, as a consequence, it lost the KNH tender and the profit it expected to earn from it.
4. The Plaintiff called one witness, Mr Kalpesh Gosrani (PW1), who described himself as the Plaintiff’s local agent. The Defendant called Mr Stephen Mutua (DW1), one of its directors, and Mr Enock Katam (DW2), the Head of the Textile Laboratory at KEBS. Their oral evidence is important because it narrows considerably the matters that are truly in dispute.
5. I have considered the pleadings, the documentary evidence, the oral testimony and the parties’ submissions. The dispute turns principally on what the Plaintiff contracted to supply, whether the Defendant proved that the goods actually shipped were non-conforming, and the consequences that follow from those findings.
Issues for determination
6. In my view, the following issues arise for determination:
a. Whether there was a valid and enforceable contract between the parties and, if so, what its material terms were.
b. Whether the Plaintiff breached the contract or the implied conditions under the Sale of Goods Act by supplying goods that were not reasonably fit for their purpose or of merchantable quality.
c. Whether the Plaintiff is entitled to recover the purchase price of USD 376,644.70.
d. Whether the Defendant has proved its Counterclaim for Kshs. 17,797,167.28 or any other damages.
e. Who should bear the costs of the suit and Counterclaim.
Analysis and determination
7. The governing evidential principle is straightforward. Under sections 107 and 108 of the Evidence Act, a party who asks the Court to find in its favour on the existence of a fact bears the burden of proving that fact, unless the law places the burden elsewhere. The applicable standard in this civil dispute is proof on a balance of probabilities. The Court must therefore determine which account is more probable on the evidence as a whole.
8. That burden is particularly important here. The Plaintiff must prove the contract, its performance and the Defendant’s failure to pay. Conversely, because the Defendant relies on alleged non-conformity both as a defence to the price and as the foundation of its Counterclaim, it bears the burden of proving the facts on which that alleged non-conformity rests.
Whether there was a valid and enforceable contract and what its terms were
9. There is no real dispute that the parties entered into a contract. The Defendant’s own pleading proceeds on that basis, and its Counterclaim necessarily depends upon the existence of the same contract. The evidence shows negotiations by email, the supply and approval of samples, the issue of a proforma invoice, arrangements for shipment, and the eventual shipment of the goods. Those acts are consistent only with a concluded commercial bargain.
10. The more important question is the content of that bargain. The Defendant’s email of 16th May 2016, at pages 26 to 30 of the Plaintiff’s bundle, set out the products required and a number of specifications. PW1 accepted in cross-examination that there was a KNH tender and that the Defendant intended to obtain the goods from the Plaintiff for onward supply. He also accepted that the email contained specifications relating, among other matters, to expiry dates, waterproof material and absorbency. He was clear, however, that the goods were to be supplied in accordance with the specifications communicated by the Defendant.
11. The evidence further shows that physical samples were supplied before manufacture and shipment. PW1 testified that the samples were approved before shipment and that pre-export inspection took place in China. DW1 independently confirmed that samples had been received in May 2016 and that a Certificate of Conformity (“CoC”) was issued following inspection at the port of loading. These matters are material because they demonstrate that the Defendant had an opportunity, before the commercial quantities were shipped, to examine the type of product it had ordered.
12. The Plaintiff thereafter issued a proforma invoice at page 54 of its bundle. The invoice identified the goods, quantities and price and, importantly, referred to “TENDER NO. KNH/T/02 PART A/2016-2018”. I therefore do not accept the proposition, appearing in parts of the parties’ arguments, that the Plaintiff had no knowledge at all of the KNH tender. The document shows that by the time the proforma invoice was issued the Plaintiff knew that the transaction was connected to that tender.
13. That finding, however, does not answer the separate question whether every technical requirement in the KNH tender became a contractual term between these parties. The evidence does not show that the tender document itself was incorporated into the contract, nor that the Plaintiff warranted that the Defendant would pass KNH’s technical evaluation or win the tender. The contractual specifications proved before the Court are those communicated in the parties’ correspondence and reflected in the samples and commercial documents.
14. The parties’ subsequent conduct reinforces that conclusion. The Defendant supplied shipping information, dealt with the import documentation and did not, before shipment, object to the descriptions contained in the proforma invoice and packing documents. I therefore find that there was a binding contract under which the Plaintiff was required to supply goods conforming to the specifications communicated by the Defendant, subject also to such conditions as the Sale of Goods Act implied into the transaction.
Whether the Plaintiff supplied goods that were unfit for purpose or not of merchantable quality
15. Section 16 of the Sale of Goods Act is central to this issue. Under section 16(a), where a buyer makes known to the seller the particular purpose for which the goods are required in circumstances showing reliance on the seller’s skill or judgment, there is an implied condition that the goods shall be reasonably fit for that purpose. Under section 16(b), where goods are bought by description from a seller dealing in goods of that description, there is an implied condition that they shall be of merchantable quality. The proviso to section 16(b) excludes defects which an examination by the buyer ought to have revealed.
16. Kenyan courts have applied section 16 according to its terms. In Best Cars Limited t/a Impact Motors v Omoke & another [2025] KEHC 474 (KLR), the High Court applied section 16 and emphasised that the proviso concerning examination by the buyer is confined to defects which the examination ought reasonably to have revealed. The question here is therefore evidential: did the Defendant prove that the goods supplied by this Plaintiff breached the implied conditions relied upon?
17. The Plaintiff relies on the CoCs dated 22nd and 31st August 2016, issued by CCIC Inspection Co. Ltd under the pre-export verification regime. PW1 testified that the goods could only be shipped after that inspection. DW1 also accepted that a CoC had been issued at the port of loading. The certificates are not conclusive proof that the goods could never subsequently be found non-compliant. Indeed, PW1 fairly accepted in cross-examination that KEBS retained power to inspect at the point of entry and that the CoC did not discharge the importer or exporter from their legal or contractual obligations. The certificates nevertheless constitute contemporaneous evidence that the goods presented for export had passed the prescribed pre-export conformity process.
18. The Defendant relies on two distinct bodies of evidence in answer. The first concerns the samples submitted to KNH. The letters dated 6th and 15th December 2016 record that samples failed aspects of KNH’s technical evaluation. But DW1 made a critical admission in cross-examination: the samples examined by KNH were not taken from the containers that arrived at Mombasa. They were samples received earlier, in May 2016, and supplied to KNH before the consignments arrived. Those letters may therefore prove that the pre-shipment samples did not satisfy aspects of KNH’s tender evaluation. They do not, without more, prove that the commercial consignments subsequently manufactured and shipped contained the same defects.
19. The timing of the Defendant’s conduct is also relevant. On 28th October 2016, before the later KEBS testing, the Defendant sought assistance to return the goods to China because the tender had been cancelled while the goods were at sea. PW1 confirmed in cross-examination that the tender had been cancelled while the goods were in transit and that this had nothing to do with the supplier. The contemporaneous communication did not identify defective quality as the reason for wishing to reverse the transaction. That does not make a later quality complaint legally impossible, but it is a circumstance the Court must weigh when deciding whether that later complaint has been proved.
20. The second body of evidence is the KEBS testing. DW2 was a qualified textile engineer and the head of the relevant laboratory. His evidence established that certain samples received by the laboratory in January 2017 failed specified parameters. For example, he testified that an adult diaper sample returned a result of 8.7 against a minimum requirement of 10, and that an under-pad recorded water resistance of 46 against a requirement of 150. His evidence was therefore capable of proving what the laboratory found in relation to the samples it tested.
21. The difficulty lies in proving the provenance of those samples. During the hearing, pages 5, 8 and 9 of the laboratory reports were expunged because the relevant expert was not present to produce them. More importantly, DW2 candidly accepted in cross-examination that he did not personally receive the samples from the inspection officer. He could explain the ordinary internal KEBS process by which samples move from an inspection officer at Kilindini, through a sample centre, to the laboratory, but he could not identify from his own knowledge the particular packages taken from the Plaintiff’s containers, the number sampled, or the act of sampling itself.
22. The evidential gap was expressly exposed during DW2’s cross-examination: the issue was not whether the laboratory had obtained failing results, but what connected the samples tested to the goods supplied by the Plaintiff. DW2 could speak authoritatively to the test results. He could not establish the source of the samples. The inspection officer who allegedly drew them, identified in the evidence as Abdi Nasser, was not called.
23. That gap is decisive. The Defendant asks the Court to infer that because samples tested at the KEBS laboratory failed certain standards, the goods shipped by the Plaintiff were necessarily defective. But the intermediate fact, namely that the tested samples were drawn from these particular consignments, had to be proved. On the evidence before me, it was not. The Court cannot fill that missing link by assumption.
24. I have also considered the Defendant’s reliance on the KNH tender as the particular purpose under section 16(a). As already found, the Plaintiff knew that the transaction was connected with the KNH tender. That knowledge is relevant. But even assuming that section 16(a) imposed an obligation that the goods be reasonably fit for that disclosed purpose, the Defendant still had to prove that the goods actually supplied were unfit. The KNH evidence related to earlier samples, while the later KEBS evidence was not sufficiently linked to the shipped consignments. The statutory implication does not relieve the buyer of proving the alleged breach.
25. As to merchantable quality under section 16(b), I would not go so far as to hold that the Defendant’s examination of samples extinguished every implied condition as to quality. The statutory proviso is narrower: it applies only to defects which that examination ought to have revealed. The decisive point remains that the Defendant has not proved, on a balance of probabilities, that the consignments shipped were affected by the defects later alleged.
26. Nor does the fact that the transaction was on CIF terms determine whether the goods were conforming when shipped. CIF terms are relevant principally to delivery, documents, insurance and the passing of risk. They do not excuse a seller from supplying goods that conform to the contract at the point when its contractual obligation is performed. The Plaintiff succeeds on this issue not because risk had passed, but because the Defendant has failed to prove that the goods supplied were non-conforming at the material time.
27. I therefore find that the Defendant has not established its pleaded defence that the Plaintiff breached the contract by supplying goods that were unfit for purpose or not of merchantable quality. The contemporaneous pre-export certificates support the Plaintiff’s case, while the Defendant’s evidence does not sufficiently connect either the KNH sample failures or the KEBS laboratory failures to a breach in the actual consignments for which payment is claimed.
Whether the Plaintiff is entitled to the purchase price
28. It is common ground that the goods were manufactured and shipped and that the Defendant did not pay the invoiced price. DW1 accepted that it was the Defendant’s duty to collect the goods when they arrived, and further accepted that the Defendant did not clear them. The Plaintiff’s invoices and shipping documents identify the consideration claimed as USD 376,644.70.
29. The Defendant’s justification for non-payment depended substantially upon establishing that the goods were lawfully rejected for non-conformity. For the reasons already given, that defence has not been proved. The contemporaneous email of 28th October 2016 is particularly significant because the Defendant’s first recorded reason for seeking to return the goods was the cancellation of the tender while the consignments were in transit, not a defect in the goods.
30. A buyer’s commercial purpose failing after goods have been ordered and shipped does not, without a contractual term transferring that risk to the seller, discharge the buyer from its payment obligation. No such term has been proved here. The Plaintiff performed the bargain proved before the Court by manufacturing and shipping the ordered goods. The Defendant did not take delivery or pay.
31. I accordingly find that the Plaintiff has proved its claim for the agreed purchase price of USD 376,644.70 on a balance of probabilities.
Whether the Defendant’s Counterclaim should be allowed
32. The Counterclaim seeks Kshs. 17,797,167.28 as alleged loss of profit from the KNH tender, together with other relief. It fails at the first stage because I have found that the Defendant did not prove breach by the Plaintiff. There is therefore no contractual wrong upon which the claimed damages can rest.
33. Even if I had reached the opposite conclusion on breach, the Counterclaim would still encounter substantial difficulties of causation and proof. The Defendant was required to show, not merely that its samples failed aspects of technical evaluation, but that absent the Plaintiff’s breach it would probably have secured the tender and earned the profit claimed.
34. The evidence did not establish that proposition. The tender was competitive. The material before the Court did not demonstrate that the Defendant was entitled to the whole of the tendered quantities, or that it would necessarily have prevailed over competing bidders. DW1’s own evidence was that “the initial cancellation of tender was not an issue”, while the contemporaneous correspondence shows that cancellation was the reason initially given for seeking to return the goods. Those matters make the asserted causal chain uncertain.
35. There is a further problem with quantum. The schedule relied upon by the Defendant repeatedly describes costs and figures as “approximate”. A claim for a quantified loss of profit of this nature is a claim for special damages and must be specifically pleaded and strictly proved. The Court of Appeal stated that principle in Hahn v Singh [1985] KECA 129 (KLR) and reaffirmed it in Capital Fish Kenya Limited v The Kenya Power & Lighting Company Limited [2016] KECA 56 (KLR). The latter decision emphasises that a claimant cannot simply place figures before the Court without credible evidence proving the loss claimed.
36. Here, the Defendant did not produce evidence establishing an award of the tender to it, a contractual entitlement to the quantities on which the calculation was based, or contemporaneous financial material proving the net profit that would have been earned. The figure of Kshs. 17,797,167.28 is therefore not strictly proved.
37. The Defendant’s prayers for general damages and loss of bargain do not alter that conclusion. The Court of Appeal has repeatedly affirmed that, as a general rule, general damages are not recoverable for breach of contract where the loss claimed is capable of quantification. See Kenya Tourist Development Corporation v Sundowner Lodge Limited [2018] KECA 312 (KLR). The Defendant having quantified its alleged commercial loss, but failed to prove it, the Court cannot substitute an unparticularised award of general damages for the loss which was pleaded but not proved.
38. The Counterclaim is therefore dismissed in its entirety.
Costs
39. Under section 27 of the Civil Procedure Act, costs are in the discretion of the Court, though they ordinarily follow the event. The Plaintiff has succeeded in its claim and has successfully resisted the Counterclaim. I see no reason to depart from the ordinary rule. The Plaintiff shall have the costs of both the suit and the Counterclaim.
Conclusion and disposition
40. For the foregoing reasons, I make the following orders:
a. Judgment is entered for the Plaintiff against the Defendant in the sum of USD 376,644.70.
b. Interest on the said sum shall accrue at court rates from 11th January 2017 until payment in full.
c. The Defendant’s Counterclaim is dismissed in its entirety.
d. The Plaintiff is awarded the costs of the suit and the Counterclaim.